Actionstep has been built as a compliant trust accounting system in New Zealand. The New Zealand Law Society does not provide certification to software companies so whilst we are compliant there is no certification process.
This article explains the main differences when using the New Zealand - New Zealand Law Society plug-in.
Firms interest in trust
The Firm's Interest in Trust denotes the amount of funds within a trust account that do not belong to clients it is essentially the law firms own money sitting in the trust account. It can be used for Client Advances (where the client is short of funds to pay another party).
NOTE/EXAMPLE: When you perform a transfer of any kind within trust accounting the transaction will flow through the trust transfers account so you can see this in the general ledger.
To adjust the firm's interest in trust, simply access Trust → Firm's interest in trust → Adjust Firm's interest in trust
This will take you to the following page:
Trust account: Select the relevant trust account to pay from/into. Usually, this would be the trust current account.
Direction: You can either Pay from the Firm's interest in trust or Receive into Firm's interest in trust.
|TIP: It is common for firms to pay invoices to their firms' interest in trust and then transfer a certain amount out of the firms' interest in trust to their business account (normally leaving a buffer in the firm's interest in trust to cover any advances that may be required. If more funds are required in the firms' interest in trust then you can use the received into the firms interest to transfer funds from the business account to the firms' interest in trust.|
Linked System Accounts
This is a System Account for New Zealand jurisdiction users only. It helps with any transaction that uses the Firm's Interest in Trust.
Only the date field is required in terms of a cheque receipt and there is no requirement for the client's address.
The wording "Official Receipt Form for trust moneys" must appear on the receipt.
No details of a cheque are required in relation to a trust payment.
You are operating the Actionstep system to administer your trust accounting. You must present your records in a form that demonstrates the salients that the Law Society Auditors look to you to check and verify.
Every day (depending on the number of trust transactions) you should be reconciling your trust account in Actionstep. See our user guide Article on Trust Reconciliations
Each month's end you should produce the following reports on your trust current account:-
Bank Reconciliation - see Bank Reconciliations (scroll to the end on how to produce reconciliation monthly reports - this report allows you to combine all your reconciliations into one monthly reconciliation if you reconcile many times during a month)
Control account summary (aka cash book) - print out monthly report for Trust Account Receipts Cash Book (article found Broken Link Article) and Trust Account Payments Cash Book (article found Broken Link Article)
Month-end trust account bank statement - download and save this as PDF
List of client balances (trial balance) - (found Broken Link Article)
If you have an Interest Bearing Deposit you should also produce the following:-
Bank Reconciliation - see Trust Reconciliations (same as above but choose the IBD Trust Account)
Control account summary (aka cash book) - print out monthly report for Trust Account Receipts Cash Book (article found Broken Link Article) and Trust Account Payments Cash Book (article found Broken Link Article) - again same as above but choose your IBD account.
List of all Interest-bearing accounts in Actionstep - see Broken Link Article
Bank Statement showing month's transactions - download from bank
Bank Statement showing month-end balances of each IBD Account
If you have or develop any controlled bank accounts or foreign exchange bank accounts, details of these will require inclusion. A bank statement showing the month’s activity will usually suffice.
We also recommend that you run the following reports for completeness
A Stale Balance report - found Broken Link Article
A journal transaction report (aka Trust Audit Log) (if you have staff administering the trust account) - found Broken Link Article
A print out of the firms interest in trust ledger (aka firms interest in trust breakdown) - found Broken Link Article (if you operate firms interest in trust)
So what to do with all these monthly reports and statements?
We recommend that you create a matter under an administration matter type (remember, Actionstep can also be used to maintain records and monitor your administration and your legal matters/files).
You can then create a folder for each year and a subfolder within each year for each month. Upload all of these reports to the correct year and month folder. This way your auditor can see all of the reports required by gaining access to one matter.
The New Zealand Law Society Auditors also expect that you keep a hard copy file of all reports and statements for a minimum of 6-12 months by which only electronic copies are required.